"July 3 –U.S. Senators Lamar Alexander (R-Tenn.) and Bob Corker (R-Tenn.) announced today they have introduced legislation to ensure Medicare beneficiaries in Tennessee continue to have access to medical equipment.

The bill would require the Centers for Medicare and Medicaid Services (CMS) to conduct a rebid for contracts to supply medical equipment to Tennessee’s Medicare beneficiaries through a new competitive bidding system that launched July 1. The senators have called for CMS to fix and restart the competitive bidding program in the state after they found last month that 30 of 98 contracts were awarded to companies not licensed in Tennessee and would have to be voided, just two weeks before the program began.

Alexander said: "We cannot afford to risk the health of Medicare recipients in Memphis, Nashville, Knoxville and Chattanooga who depend on necessary medical supplies by launching a troubled program that may not be able to meet their needs. The administration needs to rebid the contracts to businesses that are licensed in Tennessee and assure beneficiaries that they won’t be left high and dry."

Corker said: "It is important for those who rely on Medicare to know that it is working fairly and efficiently. After CMS admitted their mistake, the only way to ensure this program operates equitably in Memphis, Nashville, Knoxville and Chattanooga is to require CMS to rebid the contracts."

On May 21, Senators Alexander and Corker, along with Representatives Marsha Blackburn (R-Brentwood), Phil Roe (R-Johnson City), John J. Duncan, Jr. (R-Knoxville), Chuck Fleischmann (R- Ooltewah), Scott DesJarlais, (R-Jasper), Jim Cooper (D-Nashville), Diane Black (R-Gallatin), and Steve Cohen (D-Memphis) sent a letter to CMS requesting details on its policy of awarding Medicare contracts for durable medical equipment to businesses not licensed in Tennessee, a violation of the administration’s bid policy and a violation of Tennessee state law. Durable medical equipment includes products that are intended for at-home care of sick or injured individuals. The category includes wheelchairs, crutches, blood pressure monitors, and hospital beds.

As a result of their inquiry, CMS found that 30 of 98 contracts had been awarded to businesses not licensed in Tennessee and would be voided—just two weeks before the program was slated to begin.

In a June 14 letter responding to the inquiry from the members, CMS administrator Marilyn Tavenner, said: “We have determined that certain out-of-state suppliers that were licensed in their home state, but that did not meet aspects of existing Tennessee licensing requirements at the time of bid submission, were awarded contracts. As a result, CMS will take steps to void contracts for these suppliers in the Tennessee competitive bidding areas, consistent with the policies and guidelines established for the competitive bidding program. This applies to approximately 30 out of the 98 contract suppliers in the Tennessee Competitive Bidding Areas.”

The Medicare Durable Medical Equipment Competitive Bidding program requires home medical equipment suppliers to bid for contracts to serve Medicare beneficiaries in select metropolitan statistical areas across the country.

Winners are chosen on best price to the government, capacity, quality service, and the financial requirements including holding a license from the state.Medicare beneficiaries will then only be allowed to purchase home medical equipment from the winners for their metropolitan statistical area.

Tennessee has four areas in the program: Memphis, Nashville, Knoxville, and Chattanooga."

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